Bank Of Russia To Promote Use Of Digital Ruble In Foreign Trading

Just days after the two institutions had come to an agreement about legalizing cross-border crypto payments, the Russian central bank and the finance ministry once more showcased their different priorities.

While the Russian finance ministry will be working on legalizing the use of crypto payments for international settlements, the Central Bank of Russia (CBR) will promote its own digital currency for this purpose.

Crypto legalization

A recent documentary showed Elvira Nabiullina, the Governor of the Central Bank of Russia (CBR), stating that they would be actively promoting the use of the digital ruble for cross-border payments.

The film was dedicated to the 220th anniversary of the Russian Finance Ministry. The Treasury Department had announced recently about reaching an agreement with the CBR.

This was in relation to legalizing the use of crypto for making international payments in light of the Western sanctions on the country.

The ministry said that the two regulatory authorities had agreed that making cross-border settlements in crypto was necessary in light of the current conditions.

Alexey Moiseev, the Deputy Finance Minister, had also said that crypto payments would be legalized in the Russian Federation soon.

The conflict

The State Duma’s Financial Market Committee’s head, Anatoly Aksakov had also joined the call for crypto legalization to make payments for foreign trade.

Government officials were making statements about the necessity of using crypto for international settlements in order to get around the Western sanctions that are putting exporters and importers under pressure.

But, it appears that the CBR has different plans, as the monetary authority said that it would give priority to the use of the digital currency that the state is planning to issue.

Nabiullina said that as opposed to private cryptocurrencies, digital financial assets (DFAs), which have an issuer, are a better option.

The country is also considering the option of using stablecoins for making settlements with friendly nations.

Digital ruble

The governor of the Russian central bank indicated that there were a number of banks and other financial organizations that had shown their interest in participating in the pilot project.

It expects to complete its central bank digital currency (CBDC) in the next year. She also stated that they would link the platform of the digital ruble with the digital currencies introduced by other countries.

The chairperson of the CBR said that they would also promote the use of digital rubles for making cross-border payments.

Nabiullina said that once they successfully complete the pilot project, the digital ruble would be gradually introduced by the Bank of Russia in the domestic market in 2023.

She said that the government-backed coin would be used for certain operations. Meanwhile, the finance ministry would work on crypto legalization for cross-border payments.

Moiseev said that this process would begin in the fall session of the State Duma. He stated that while such payments were not banned in Russia, it was still necessary to introduce regulations for exchanging crypto with fiat.